Q: How has the economic climate of the past two years impacted the current state of beauty packaging?

Dent: I am an eternal optimist and believe constraints in budget and other resources spur the truly creative to be more innovative with what they have. Yes, of course the economic climate has affected many things, which include the amount of money spent on new research into innovative materials, but this should not stifle great new ideas. They will just have to be developed for more readily available materials. There is beauty in austerity too, just so long as it is well-designed austerity!

Trout: While the economic downturn significantly impacted a number of industries—including segments of the beauty packaging sector—the industry has held strong in a number of areas. For instance, the sale of antiaging products grew throughout the recessionary period of late 2008 through early 2010. In this case, brand extensions, rather than new brand launches, accounted for the majority of that growth. So, from a packaging standpoint, the demand for airless packaging was often requested during the down economy.

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As we continue to emerge from the recession, we’re confident in the growth of the beauty industry. Just this month, industry analysts confirmed they expect an 8.5% growth in the worldwide beauty and cosmetics industry by 2014. We’re already helping customers plan for new, industry-first product launches that will definitely excite the marketplace.

Nagel: JSN has been fortunate to have experienced expansion of manufacturing demands during this economic downturn. We attribute this to the fact that we are a family owned company, with a long-standing commitment to quality and customer service.

Schinazi: Our clients have been all badly impacted by a dramatic shortfall of sales (from minus 5% to minus 40%). Luxury brands have been more impacted than masstige brands. Therefore we have been also impacted and, in 2009, we have had a 20% sales decrease versus 2008.

Dwyer: The GFC has certainly affected business globally and the market in three ways. Buyers have reduced their optimism and have kept inventories very low or run them down. New projects and launches have been decreased or held. Companies have focused more diligently on cash flow and many have slowed their payment terms as a result.

Holland: I believe traditional high-end beauty products were hit harder than value brand products. As a result, packaging sales for high-end products fell off significantly and packaging for value brand products remained active. We also saw many product launches pushed back or in some cases, abandoned completely.

DiPietro: Whether used for keeping up appearances or curing minor ailments, personal care is, ultimately, about feeling good. Sometimes, that means buying products to escape the reality of the recession.

However, the beauty industry overall took a hit as budget-conscious consumers refrained from spending, especially in the past couple of years. Despite the recession, cosmetics and personal care product companies have emerged, from private label to natural and organic products.

The need to innovate and create packaging that grabs attention and resonates with consumers is even more important. At the same time, the possibility of a recovery is mirrored in these choices as well—we’re seeing firms selecting brighter, happier colors that inspire optimism.

Bakic: The past two years were dominated by budget restrictions and a lower level of activity with respect to new launches. Today, we feel this vacuum needs to be fed and many of our customers—although still cautious—are now urgently seeking innovation and ways to differentiate.

Izquierdo: During the past two years, the beauty packaging industry was adversely affected by the economic downturn, just like many other market sectors. As a result, many suppliers of primary packaging elements such as tubes, caps and pumps, reduced product stock to decrease overhead and improve profitability. This, in turn, led to longer delivery times to get products to market and impacted future growth, as packaging manufacturers had a limited supply they could leverage to respond to new business opportunities.

However, the economic climate has been improving overall, and we will continue to see steady growth in the foreseeable future. PMMI’s third quarter economic outlook report indicates personal care product packaging, which includes cosmetics, will grow by 4.1% in 2010 and will increase by another margin of 4.1% in 2011.

Bielefeldt: Starting in late 2008 and carrying through most of 2009, beauty companies postponed a lot of custom bottle projects that were in the early stages. Instead of updating their packaging, most of these companies continued to use the packaging they were already using until they were confident sales had picked up again. A few other companies may have changed their packaging as scheduled, but utilized stock packaging components instead of custom bottles and closures. So now, there are a lot of projects and packaging updates that had been postponed and are now being resumed half way through 2010. We expect late 2010 and all of 2011 to be very busy with custom bottle projects.

Q: What are the primary global trends—across industries, markets and sectors—that have impacted how and what you’ve created?

Trout: With disposable income rising in emerging economies, beauty companies are targeting these countries more aggressively than ever to help increase their global market share. We’ve seen strong growth in China, Brazil and India. Overall, in emerging and developed markets, consumers still see packaging as part of the product itself. So brand owners are coming to us with specific questions on what will help a product to stand out on the shelf. Customization is key. That’s why MWV has been partnering with customers to design tailored packages that complement and represent their respective brands. With truly innovative and eye-catching packaging, our customers can better compete in the changing global marketplace.

Nagel: More than ever, brand owners are once again looking for high-quality, U.S.-made products to ensure the success of their brands. JSN is very committed to maintaining equally high standards when it comes to environmental requirements. All of our plastics are recyclable, and our manufacturing machinery choices also emphasize minimal waste of materials, with built-in recycling functions. We expect this issue to become increasingly more important as advances in plastics science helps our industry become greener and cleaner.

Schinazi: Decisions on launches are being made very late, and there is a lot of cautiousness before launching a new product. Therefore most of the time we have to struggle to deliver all the packaging on time. To summarize, I would say clients are more demanding with value for money and delivery times.

Dwyer: We see a big trend in adding value through technology. Cosmopak launched three items that contain a motor. The motorized triball [photo available in online version of the feature] is the most popular. It incorporates a vibrating motor that has a much higher perceived and actual value. This allows users to massage the area on application. It allows brand owners to really differentiate themselves from competitors. It also increases the role played by the packaging, which allows them to provide an enhanced application. It used to be formula and package equals product. It is now possible to have formula, plus package plus treatment all in one. The bar has been lifted in what a container can deliver and how much a consumer will pay for it.

Holland: Many industries are more comfortable in pursuing off-shore alternatives that provide lower costs but also come with more difficult logistics. This transcends most markets and sectors. At Kaufman, we’re always working with our global suppliers to ensure they continually meet our strict quality requirements. In addition, we are challenging both domestic and global suppliers to focus on innovation. Our customers want to see options, and it is our job to make sure we can provide them with the latest and greatest offerings in the industry.

Sustainability is also a large factor in terms of packaging selection. We offer many options for our customers on this front—from PCR to lighter gram weight to decorating techniques or helping with logistics—and are always willing to explore ways to make their package more environmentally conscious.

DiPietro: Because of the wide range of industries we serve, there are a number of global trends that influence or guide our R&D initiatives.

There is an increasing emphasis on having products that are compliant with chemical legislation on a global basis. The implementation of REACH in the European Union and the debate about U.S. changes to TSCA make it imperative companies choose suppliers that have extensive knowledge of global chemical legislations and can help customers ensure they use safe and regulatory-compliant materials.

Today, whenever DayGlo develops new products, we always look closely at these regulations and design materials in order to make sure we address the broadest possible global scope. Sustainability has become less of a trend, so to speak, and is now an integral way of conducting business.

Bakic: We believe one of the primary drivers and challenges of today’s world is that target groups get smaller and more and more diverse, and that companies need to address these groups with even more specific offerings. This, in turn, will make it even more difficult to differentiate yourself from competition and leads to a tremendous level of complexity within organizations. The one who will manage this complexity the most efficient way and who will find the right balance between customer satisfaction and efficiency will win customer recognition and be rewarded. As a full-service packaging provider, we can help our customers to take care of this complexity.

Izquierdo: One example is the backlash experienced from “greenwashing.” In an attempt to appeal to the growing audience interested in sustainably produced products, many brands make vague or misleading “green” claims.

With the help of the Greener Package Guidelines to Sustainability Claims, consumer packaged goods companies now have a neutral, third-party system to back up their claims and help them research and compare sustainable packaging materials, containers and suppliers. The tool was developed by Greener Package and Environmental Packaging International (EPI), with input from Packaging Knowledge Group LLC (PKG).

This fall’s Pack Expo International 2010 (October 31–November 3, Chicago) will place a heavy focus on the topic, with many exhibitors highlighting materials and equipment that can help cosmetic and personal care brands achieve sustainability goals. Several of the expo’s allied partners will also be addressing sustainability, including the Institute of Packaging Professionals (IoPP).

Bielefeldt: European beauty brands tend to use more colorful bottles with challenging bottle shapes. Our product development is certainly impacted by the trends we see coming from across the globe, and many of our “in-between” bottle sizes have been influenced by the sizes of bottles commonly sold in other countries. (For example, developing 10-ounce bottles to fill a need between 8-ounce or 12-ounce sizes.) We see the request for custom colors across industries—beauty brands, nutritional supplements, even pet products and household chemicals—and we can respond to requests for custom-colored PET because we have relatively low minimums for custom colors.

Another global trend that was on hold for most of 2009 was the use of recycled packaging with postconsumer resin (PCR). We see many of the PCR projects that were delayed in 2009 moving ahead now.

Q: What traps can brand owners fall into, when considering their packaging, if they respond to the wrong fad/trends or respond/execute in the wrong way?

Gadomski: Brand owners must focus on which trends will develop into long-term consumer preferences rather than fads that will surely be short-lived. They must carefully consider what trends have lasting potential. Brand owners risk a fleeting brand popularity that won’t stand the test of time by responding too rashly or too severely to any given fad. They also risk creating a very specialized niche for a brand that won’t be able to evolve with changing trends.

Dent: I believe the fad/trend to show that your packaging is sustainable (as in exposed natural fibers, obvious recycled content, awkward reuse of materials) is one that is easily executed in the wrong way. We have moved beyond these obvious signifiers of sustainability to a period when the impact needs to be quantified and does not always need to be obvious from a visual/tactile sense.

Trout: The biggest risk, especially in the midst of a challenging economy, is to ignore total cost of ownership. Supply chain, logistics support, flexibility, time-to-market, consumer confidence and satisfaction—these are difficult to measure but can often impact packaging cost and market success.

Nagel: To help owners avoid wrong-way fads, JSN supports brand owners by providing marketing feedback on what we see as being the most appealing directions. As a domestic manufacturer we also help companies avoid the risk of products being out of stock if off-shore packaging doesn’t perform. Additionally, there can be branding issues if package or label colors don’t match from batch to batch. Our many years of experience help us evaluate the best direction a new design requirement may need to take in all these regards.

Schinazi: I think the worst would be to save on the quality of the packaging. This could have strong consequences on the sell out. Competition is fierce and each brand has to keep its presence in POS. Producing cheap packaging could be dramatic at the end.

Dwyer: It seems many brands feel they need a truly unique package when they launch. This can lead to problems with reorders when they cannot meet the MOQ, and can hurt their cash flow as it means the inventory they need to hold is greater than it needs to be. Taking a standard package and using some creative design or graphics can create a very unique look without incurring a huge up-front cost.

Holland: My only comment here is to caution owners to work with packaging suppliers that perform the necessary due diligence when selecting a manufacturing partner. For instance, we do quality systems audits on all domestic and global suppliers. We want to be confident that our customers have a package that will perform. We have heard too many horror stories of folks who wanted to cut back expenses but ended up with a mess on their hands. The integrity and quality of the package you are supplying is paramount. Also, think about the total package. All the individual components have to work together. We have an advantage here because we can supply most of the components and manage the functionality as well as the aesthetics, such as color matching of all substrates.

DiPietro: Color trends are always evolving and play a significant role in the fashion and beauty world.

From a marketing standpoint, this can lead to “me too” packaging when brands jump on the color of the moment and implement what everyone else is doing rather than creating a unique brand identity with color. What’s great about DayGlo is that, regardless of the color trends, we are able to customize and make colors better through special effects, conventional pigments, and even mixing our signature fluorescents with traditional pigments to achieve rich new shades for both cosmetics packaging and products Whenever you incorporate a new technology to your process, you run the risk that it hasn’t done its due diligence. That’s why it’s so important to work with partners who can help reduce errors during the integration. One of the things we pride ourselves on is that we work closely with regulatory bodies and our in-house abilities to run a complete and thorough testing phase.

Bakic: Packaging is meant to clearly embody the equity of a brand. It is therefore of great importance that all components of the packaging mix speak the same language. Using too many different shapes, colors and graphic styles within one line can lead to consumer disorientation and jeopardize a clear brand message. We provide packaging families that have a homogeneous and consistent appearance across all products where the consumer at the point-of-purchase can identify that all the packaging belongs to the same brand, even if the products are placed at different points on the shelf.

Izquierdo: Similar to other industries, cosmetics that are free of preservatives, are all-natural or organic is a growing trend. Brands in this sector often carry the same philosophy into the product’s packaging, whether in terms of using recyclable materials or minimizing waste overall.

Waste can be looked at in several ways. Single-use applications are one way of reducing waste; we expect to see this approach continue to grow. A great example is Cargo’s DailyGloss, which packages a 30-day supply of lip gloss in individually sealed blister packs.

Over-packaging of cosmetics is another real concern for brands and consumers alike. Protecting the beautifully designed containers and graphics that are the hallmark of this segment often means adding a layer of secondary packaging. Many brands are taking steps to remedy this and cut back on excess use of cartons and unnecessary exterior packaging. One brand that comes to mind is Lush Cosmetics, that sells its products “naked” to the consumer.

Bielefeldt: If a brand owner is trying to emulate another brand already in the market, either by copying a bottle shape or using similar colors or graphics, that brand needs to act fast. If it takes a company 12 or 18 months to join a trend, it will be too late.

Q: Which consumer demands or expectations for/from packaging do you anticipate to continue to impact packaging?

Gadomski: Airless skin care packaging continues to gain momentum. As consumers become more and more educated on the benefits of airless packaging, they increasingly demand it from their favorite skin care brands. The ability of airless packaging to dispense nearly 100% of the product within is extremely important to consumers given the current economic climate.

Trout: The market for organic and eco-friendly beauty products continues to grow each year with some segments outpacing the rest of the market. Consumers are more and more concerned about the nature of the ingredients found in their trusted cosmetic and skin care products. The growth of airless systems in these categories along with new developments for preserving product, eliminating metal contact and maximizing product evacuation are partly in response to this trend.

Nagel: There is a growing interest in plastics that are both greener in the manufacturing process and that recycle faster.

Schinazi: More and more clients are interested in the idea of reusable packaging. We are sometimes doing very high-end packs that may be reusable as a gift box.

Dwyer: The focus on technology and recycling.

Holland: Functionality, value and innovation. If a product is easier to use, store and reuse, then that becomes a real value. The package has to make sense with the product consumers are getting, and it needs to work. Additionally, our ability to offer sustainable options has been and will continue to play a role in the future when it comes to meeting the end-users’ expectations for responsible packaging offerings.

DiPietro: Consumers will absolutely continue to seek environmentally responsible packaging, and that means an increased use of recycled or compostable materials, decreased packaging sizes, and greater accountability of suppliers to cosmetics and personal care product manufacturers.

We also see the demand for packaging with greater functionality, personalization or customization, and easy-to-use formats will continue to drive packaging innovations.

Izquierdo: Technology innovations allow brands to respond to consumer demands and introduce new products that would otherwise be impossible. Plant-based biopolymers come to mind here. NatureWorks markets Ingeo, a line of low-carbon footprint polymers derived from simple plant sugars. Cargo uses Ingeo biopolymer packaging for its PlantLove lipstick tubes. The lipstick’s outer packaging is infused with plantable flower seeds. Could this product have been possible without the material? It’s unlikely.

But brand owners and packaging suppliers—both of materials and machinery—need to work together differently. On the brand owner side, that means engaging all of the key stakeholders early enough in the process. Package design is often thought of as a graphic exercise, but the reality is there’s more to it than that.

This is another way Pack Expo can help. The show covers the spectrum of global packaging innovations, allowing attendees to examine how advanced materials and machinery can work in concert. This approach has a strong impact on the bottom line and enables brands to stay competitive in the marketplace.

Bielefeldt: Consumers are going to continue to demand environmentally responsible packaging. However, consumers may not always understand what forms of packaging and labeling are more Earth-friendly than others, so it will be up to the brand owner to simply and honestly explain why its packaging is “greener” than other options. Smart brand owners will incorporate environmental messages in their packaging and marketing materials so consumers can understand why their bottles or decorating method is better for the environment than other packaging.

Q: Is it getting more difficult to “wow” consumers?

Gadomski: Fusion Packaging prides itself on being a lead innovator in the industry. Our main objective is to be the supplier that is constantly introducing new concepts to the market. Our customers have come to know that each time they visit with Fusion, they will see something new and exciting. Sure, it’s challenging to keep “wowing” our customers, but it’s also our favorite thing to do!

Dent: People will always have time for beautiful things. Create beauty through harmonious form and ingenious use of materials and color/effects, and you will continue to wow. What it does rely on however, is for the designer to understand all aspects of the packaging and not to use new (new material, new color or effect, etc.) as a substitute for a lack of creativity.

Trout: Actually, no. The “wow” factor changes year-to-year, but our customers/partners expect us to bring new developments on a constant basis. We innovate for changes in formulation, for consumer expectations and to adapt new technologies. There is still a considerable thrill, though, when the “wow” is transformative rather than evolutionary. Then you know you have something.

Nagel: Yes and no. There are new ways to make a brand stand out, but at the same time it is always quality materials and printing that makes the difference.

Schinazi: Consumers are more demanding, and they know when they buy a product that they can have more for their money. Therefore, yes, they want to be amazed. That is not to say, of course, that they will not pay more for this.

Dwyer: Creating something truly different or unique can have a very big effect when executed well. There are always new entrepreneurs identifying gaps in the marketplace that they fill. The bigger the gap, the better the opportunity and the key to success is creating something very unique and simple that has universal appeal. In computers it’s Apple’s iPad, in cars it’s the Toyota Prius and in makeup it is Ellis Faas.

Holland: No, there are many examples where consumers will buy into innovative products and packaging that work together. It could be as simple as taking a traditional product and utilizing non-traditional packaging. Or vice versa—a unique product line can be represented well in fairly standard packaging. I think it comes down to maintaining the brand integrity and offering a package and product that are complementary. Of course this only works if you can maintain a price point that meets the consumer’s expectations.

DiPietro: Absolutely not—products and packaging can always be eye-catching and get noticed. And the fastest way to achieve this is through color. At DayGlo, we believe that “wowing” consumers is always about choosing the right color, not necessarily the brightest.

It’s easy to think about bright and loud colors as standing out and drawing attention, but richer, softer and more subtle shades can do this as well. As much as anything else, it’s because color affects us all on a subconscious level, an emotional level. For example, we know from a number of studies that red is equated with excitement and passion, while blue stands for trust and reliability. Black is sophisticated, purple is spiritual, orange is playful—you get the picture.

What you need to do is spend some time thinking about the kind of impact you want to have on your target audience and which colors would work best to achieve that. A color doesn’t have to be bold to catch our eye, it just has to resonate with us—that’s enough to get a “Wow!”

Bielefeldt: Consumers don’t have as much time to be “wowed,” and there are not many packaging techniques they haven’t seen before. However, you can still “wow” them with a unique color, an unexpected texture or a beautiful frosted technique that transforms a stock bottle into a special packaging experience. There are also some very unique inks (for direct screen printing) that glow in the dark, change colors when heat is applied, or light up under black lights.

Q: How is what you are creating influencing purchasing behavior?

Trout: Some of MWV’s recently commissioned research showed consumers identify a fragrance’s packaging as the main reason for trying a scent. This means there’s significant opportunity for brand owners to get creative with their packaging—whether it’s through the customized, decorative dispensing system on a high-end fragrance or a distinctive folding carton that stands out on the retail shelf. That is where MWV can help the brand make an impact and it’s what consumers want; they want to see an eye-catching package and then try out the product.

Nagel: It’s critical for brand owners to get new products to market quickly. Based on our recent growth, JSN is adding manufacturing capacity to respond to this need.

Schinazi: Beautiful packaging that’s reusable. Boxes that we will keep.

Dwyer: Our focus is always innovation, thereby hoping to supply a product that is new and unique, and therefore creating new sales for the brands we sell to.

Holland: We concentrate on providing the total package. For example, if a personal care company wants to launch a new product line with 15 SKUs that includes 10 or 12 different packaging components with different colors and decorating processes, then we are the answer. We have a pretty good history of helping marketers launch new product lines. It’s more efficient to work with one source who can do it all than 10 different sources that may never work with one another. To be able to have control of all the logistics ensures a positive end result. We have done this for years and are always looking for new options for our customers—but it is based on meeting their needs and requests. They dictate the specifics of the package and our job is to provide exactly what they want. A package that works and is delivered on time and at a cost they can be happy with. As far as purchasing behavior, that hasn’t changed through the years and will continue to be where we excel.

DiPietro: Color has been, is and always will be a major influence in purchasing behavior. It evokes emotion, shapes perception of quality, and builds brand identity. In fact, according to a University of Loyola, Maryland study, color actually increased brand recognition by up to 80%.

To understand how DayGlo’s classic fluorescents influence behavior, we conducted our own study with an independent research firm. The study revealed fluorescent products are seen 75% sooner than conventional colors; viewing time is 116% longer than conventional colors; and it generates 59% more re-examination than conventional colors. Those are powerful statistics that cannot be ignored.

Bakic: Approximately 70% of the consumption decision is done at the point of purchase. Design, material, color and graphics therefore play a very important role in initiating the consumption decision. Accordingly, it is in the first step of our task to develop products that entice consumers and spark their curiosity to consume the products. In the second step, the packaging has to be sophisticated enough through its function, handling, quality and so on to meet the expectations that were created at the point of purchase and therefore make the consumer repurchase the products.

Q: How will packaging, as a critical component of a marketing mix, continue to evolve?

Dent: There will need to be more reasons for packaging, beyond protection, information and aesthetics. What other value does it provide? With sustainability asking us to reduce packaging whenever possible, we need to show how the packaging choices we make can give added value to the customer.

Trout: When you think about a CPG brand, packaging is already a key element of brand owners’ overall marketing mix. Going forward, MWV will place a significant emphasis on helping cosmetics and beauty manufacturers further consider the opportunity to leverage packaging to help enhance brand equity and ultimately ensure a gateway to building the consumer relationship. With dispensing systems in particular, there is a strong connection between the packaging and the value that the product brings to the consumer. MWV continues to anticipate the needs of and innovate for and with brand owners as new beauty products and formulas are created.

Nagel: We feel more packaging will be in tubes, as the customer preference and ease of use continues to evolve.

Schinazi: By not being only a box but also more of a merchandise tool .The packaging will reinforce the presentation of the product itself.

Dwyer: It will continue to evolve in proportion to the success of what is launched. It seems relevant to me that given that the traditional retail environment is threatened by the Internet and most consumers want less packaging, the ability to transport a package becomes critical as more users buy online. This can and will influence how items are packaged and/or sold.

Holland: Packaging can help sell products if it is efficient, compatible, affordable, functional, attractive and innovative. We are constantly challenged by our customer base to look beyond the packaging horizon. There isn’t a stronger catalyst.

DiPietro: New packaging developments will allow for greater consumer personalization and potentially incorporate more technology.

Bielefeldt: As brand owners move more toward social media, experiential marketing and online advertising in place of traditional advertising, packaging will become more important because it will be the primary visual communicator of a brand. Colors, shapes and decorating techniques will become more important than ever.

The expert panel delves into topics such as the catalysts for next-generation packaging innovations; key brand equities expressed through packaging; new materials, designs and technologies; and working/adapting with brand owners in new ways in "More: State of Packaging 2010."